Now the question arises, when will they return to their best form?
Currently City are like toothless lions who are having difficulty beating their opponents, they were not even able to beat Everton, let alone when facing a stronger team in the UCL. If Guardiola is able to improve his squad after taking advantage of the January transfer window, he must focus more on the domestic league to be able to compete again in the top four. I'm not sure City can survive much longer in the UCL, they will definitely lose when facing the favorites.
They have to sell Kevin De Bruyne, they have to let go of IIkay Gundugan, they'll need a replacement for Kyle Walker and also a new central defender who can do neat and proper defending job. Until they do that, they'll be no where near the top or being one of the best again. Since Rodri the world best player will be returning soon from injury, his role can be overlooked but I doubt that. In the champions league, I don't see them going far.